New York State Insurance Law

December 01, 2010

Insurance agents and brokers who want to jump aboard the social media train should know who how social media interplays with insurance advertising laws.

In a November 22, 2010 opinion the New York State insurance Department Office of General Counsel responded to an inquiry made by the structured settlement watchdog, John Darer, with the following points:

1. "The the use of a LinkedIn profile page or similar website for promotion of insurance, insurers, or insurance agents or brokers, constitutes an advertisement, announcement, or statement under New York Insurance Law".

2. "A licensed insurance agent or broker who solicits structured settlement annuities MAY NOT properly speak or write about guaranty funds even in general terms, in connection with the solicitation of annuities to lawyersor their personal injury clients". (emphasis ours). As part of its analysis the OGC cited to a January 26, 2009 opinion letter that was issued in response to a request by the structured settlement watchdog in conjunction with an NSSTA brochure containing a general discussion of such funds.

3. "The inclusion of an express disclaimer in marketing materials, such as statement that the existence of guaranty funds is not a reason to buy insurance, or a direct reference to the provisions of Insurance Law 7718, will not render guaranty fund references in such marketing materials acceptable" (emphasis ours)

It is a well known fact that business people use LinkedIn, Facebook, YouTube, blogs, video podcasts and other social media to expand their business network and as a result, to write more business. Indeed the inspiration for the request was the posting by a structured settlement broker, William Fazio, of a slide presentation on the subject within his LinkedIn profile and online social groups within theLinkedIn platform, that include New York attorney members. Fazio's slide presentation still resides on LinkedIn as of December 1, 2010 at 730pm EST.

The final and perhaps most poignant question addressed to the OGC was:

is there an acceptable way under Insurance Law 7718 for a licensed insurance agent or broker to respond to inquiries on the subject of guaranty funds?

Their Answer: "Agents and brokers are advised to refer any questions about guaranty fund protection to the Insurance Department or to a licensed insurer, which may, upon a written request, provide information about the guaranty fund to policyholders by means of a form prepared by the guaranty fund and approved by the Superintendent of Insurance" (emphasis ours)

A big thank you goes out to Michael Campanelli, Esq. of the new York State Insurance Department Office of General Counsel for taking the time to write the opinion and provide thoughtful analysis that provides practical "best practices" guidance to structured settlement brokers and agents of every persuasion, plaintiffs and personal injury lawyers.

November 04, 2010

by John Darer CLU ChFC CSSC RSP

At the end of a successful mediation that involves a structured settlement, care must be taken as the mediator and the parties when documenting the case resoluton and to properly reflect the consideration and the intentions of the parties as to the structured settlelment, so as not to run afoul of New York State General Oblgations Law and Federal tax law.

§ 5-1702 Initial Disclosure of Structured Settlement Terms

In negotiating a structured settlement of claims brought by or on behalf of a claimant who is domiciled in this state, the defendant or defendant’s legal representative shall disclose in writing to the claimant or the claimant’s legal representative all of the following information that is not otherwise specified in the structured settlement agreement:

(a) the amounts and due dates of the periodic payments to be made under the structured settlement agreement. In the case of payments that will be subject to periodic percentage increases, the amounts of future payments may be disclosed by identifying the base payment amount, the amount and timing of scheduled increases, and the manner in which increases will be compounded;

(b) the amount of the premium payable to the annuity issuer;

(c) the nature and amount of any cost that may be deducted from any of the periodic payments;

(d) where applicable, that any transfer of the periodic payments is prohibited by the terms of the structured settlement and may otherwise be prohibited or restricted under applicable law; and

(e) a statement that the claimant is advised to obtain independent professional advice relating to the legal, tax and financial implications of the settlement, including any adverse consequences and that the defendant or defendant’s legal representative may not refer any advisor, attorney or firm for such purpose.

Commentary

The above is a section of the New York General Obligations Law. A number of settlement consultants are attempting to protect their turf at mediations by attempting to get their names placed into mediation agreements as "structured settlement broker of record". But does having the defense representative named in the "settlement agreement" signed at mediation comply with the NY G.O.L. 5-1702(e)?

This author recently came across a mediation document labeled "settlement agreement" in which the Defendant's representative was named as "structured settlement broker of record". A written 5-1702 disclosure was not provided to the plaintiffs at the time of the mediation. As it was the plaintiff lawyer contacted his own settlement consultant and there are consultants representing both sides of the case.

In an era when separate brokers or settlement consultants representing the adverse parties is customary and commonplace, why is it necessary for a defense or plaintiff representative to put their moniker on the mediation settlement agreement?

The agreement in question called for the consideration of "defendant paying and the plaintiff accepting the sum of ($XXX,XXX) for cash or periodic payments using XYZ Company as structured settlement broker of record at the above cost to the defendant's insurers at plaintiffs' option".

Don't know about you, but in my opinion, settlement consultants could be providing better assistance to their clients by paying more attention to how the consideration is articulated in a mediation agreement than making sure their name is inserted as part of it.

Furthermore, mediators should consider having a structured settlement friendly mediation agreement on hand.

Fortunately for the plaintiffs,. the case in question involved minors and was therefore subject to approval of the trial court.

August 07, 2010

The New York Attorney General is conduction an investigation into how life insurance companies handle death benefits. It has subpoenaed a number of companies including Northwestern Mutual, Prudential Financial, Inc, MetLife, inc., New York Life Insurance Company, Genworth Financial and Unum Group.

The investigation appears to be focused on so-called "retained asset accounts".

When an insured dies, the beneficiaries have a variety of settlement options with the life insurer. Among them they can:

Take the proceeds as a lump sum, with interest paid from date of death to date of settlement

They can take proceeds over time as an annuity in any number of payment designs.

As a former Northwestern Mutual agent I vividly recall when the company introduced its Access account in the late 1980s. NML gave a check book to the beneficiary with up to $25,000 against the policy proceeds so that the beneficiary could pay for funeral costs and other immediate expenses without the undue emotional pressure that comes with financial planning during a transition. It buys time.

The American Council on Life Insurers has said that "retained asset
accounts provide a significant benefit to family members who are dealing
with the emotional loss of a loved one. Not surprisingly financial matters may not be the first thing on their minds, and retained asset accounts provide a secure place for life insurance policy proceeds.

"It's rather perplexing or hard to see how beneficiaries would be harmed in
any way by having multiple choices open to them"

The Milwaukee Journal also reported August 3, 2010 that Wisconsin Insurance Department said that it had not received any complaints about retained asset accounts at NML but is reviewing what NML and others tell consumers about their options.

Prudential Financial issued a press release issued on July 29, 2010 that was delivered to its sale force and specifically to members of the structured settlement distribution network on or about August 6, 2010. The gist of the release discusses the vulnerability of beneficiaries to
abusive sales tactics and that a special account ("Alliance Account")
takes the pressure off beneficiary to do something with the money- which sudden money practitioners know may lead to imprudent financial decisions as well as a timely announcement concerning its talks with the Department of
Veterans Affairs in connection with the Servicemembers Group Life
Insurance Program that Prudential administers..

Members of the structured settlement profession are cautioned to exercise due care not to circulate the Prudential press release to any prospective purchasers of insurance, including, but not limited to, attorneys who might structure their attorney fees using an annuity or claimants and plaintiffs in personal injury cases. This is because the press release includes the following:

"On the subject of safety, while our Alliance Accounts are not FDIC insured (a fact that is fully disclosed in our material), these accounts are protected by State Guaranty Funds that provide protection of at least $250,000 in most states".

In a January 26, 2009 a published opinion of the New York State Insurance Department obtained by this author, the regulator concluded that a statement that " state insurance guaranty funds provide an additional levels of protection for future structured settlement recipients" which is aimed at New York residents, runs afoul of the Insurance Law". The opinion was sought after a structured settlement trade association brochure, containing the aforementioned language, was published by that association and distributed to its members with intent that its members use it with the public to assuage fears during the 2008-2009 financial crisis.
Few wanted to heed this author's pre publication warning that there might be a problem. Ergo...Download Opinion About Use of LIGCNY in Solicitation of Structured Settlement Annuities 1-26-2009.

The New York Insurance Law clearly states:

S 7718. Prohibited advertisement of the corporation in sale ofinsurance. No person, including an insurer, agent or affiliate of aninsurer and no brokershall make, publish, disseminate, circulate orplace before the public, or cause directly or indirectly, to be made,published, disseminated, circulated or placed before the public, in anynewspaper, magazine or other publication, or in the form of a notice,circular, pamphlet, letter or poster, or over any radio station ortelevision station, or in any other way, any advertisement, announcementor statement which uses the existence of the corporation for the purposeof sales, solicitation or inducement to purchase any form of insurancecovered by this article, provided, however, that this section shall notapply to the corporation or any other entity which does not sell orsolicit insurance, or to prohibit the furnishing of written informationin a form prepared by the corporation andapproved by the superintendentby a member insurer directly to a policyholder in response to a writtenrequest therefor.

July 29, 2010

For those pondering the question concerning the issue of advertising or providing of free or discounted services (such as legal services, discounted mortgage services, pre settlement financing) for plaintiffs or attorneys, in connection with or tied to the placement of insurance products such as structured settlement annuities and life insurance, the following New York Insurance Department Circular issued March 3, 2009 and authored by Paul A. Zuckerman, Assistant Deputy Superintendent and Counsel, may be helpful.

The stated purpose of the Circular Letter was "to provide guidance and clarification to licensed insurance agents and brokers (collectively, “insurance producers”) as to what kinds of services (often referred to as “value-added” services) may be provided to insureds or potential insureds without running afoul of the rebating and inducement provisions set forth in the New York Insurance Law.In response to numerous inquiries regarding these services, the Insurance Department’s Office of General Counsel (“OGC”) has in recent years issued a number of opinions on the subject. The Department recognizes that the nature of services that an insurance producer may provide in connection with sale or service of insurance continue to evolve, but even in changing conditions, certain underlying principles can guide licensees in their conduct"

Germane to the structured settlement and settlement planning industry....

"However, because they are too attenuated to the provision of insurance, or would otherwise violate the law because the services are not specified in the policy, the following services, if provided by an insurance producer to an insured or prospective insured for “free” or at a reduced fee, or otherwise offered in conjunction with insurance services, could, in the Department’s estimation, run afoul of the rebating and inducement provisions set forth in the Insurance Law. Thus, careful consideration should be given to:

• Flexible spending administration services;

• Legal services;

• Referrals to third-party service providers through which an insured or prospective insured may receive a discounted rate while the producer is the producer of record;

• Advice regarding compliance with federal and state laws concerning human resource issues not relating to the insurance provided;

• Preparation of employee benefit statements listing all of the benefits provided to employees by the employer that are unrelated to the insurance purchased;

• Development of employee handbooks and training, which are unrelated to the insurance purchased; and..."

July 25, 2010

Is it legal in New York for lawyers who are both licensed insurange agents and practicing lawyers to offer free legal services in connection with the placement of structured settlements?

In recent years the structured settlement planning industry has seen an infusion of lawyers. What is noteworthy is that some are still practicing law, some use their legal credentials as a reason to do business with them and some are offering legal services for free. What is being communicated, and is it legal in the eyes of the New York State Insurance Department?

A published opinion, at the beginning of the Millennium, entitled "Rebating and illegal Inducement by agent" may be instructive:

Questions Presented:

1. Does an attorney violate the Insurance Law when he waives legal fees for attorney work in exchange for a client’s life insurance business and, in lieu of these fees, accepts the commission from the sale of such life insurance?

2. Does the policyholder violate the Insurance Law when he accepts an inducement on the purchase of a life insurance policy that is not specified in the policy?

In the March 10,2000 published opinion of the State of New York Insurance Department Office of General Counsel

"According to the express language of the statute, insurance agents and brokers are prohibited from offering rebates or other inducements in connection with the sale of life insurance, health insurance or annuities, when such rebates or inducements are not specified in the policy or contract of insurance. The purpose of the statute is to prohibit agents and brokers from offering a contract other than what is expressly stated in the policy. Therefore, if it is not in the contract, it cannot be used as an inducement to purchase the policy.

It is clear that in this instance, the attorney’s offer of free legal service was an inducement for the client to purchase life insurance through her. The attorney’s actions are in violation of N.Y. Ins. Law Section 4224(c)(McKinney 1985).

Additionally, any insured who knowingly receives any such inducement, premium rebate, policy fee, special favor or advantage in the dividends or benefits that accrue under a life insurance policy or annuity contract, is in violation of the Insurance Law".

Comments

Lawyers who practice in the structured settlements (and those agencies that affiliate with them), need to be aware of this opinion and proceed with caution.

Structured annuities are contracts issued by a life insurance company. Inasmuch as the placement of such contracts requires a life insurance agent or life broker license to sell, agents/brokers, whether they are lawyers, economists, or accountants etc, are subject to the same rules

As of June 25, 2010 at 125am EDT, the following Questions and Answers on alleviating structured settlement fears appears on a website captioned Millennium Settlements and attributed to Bryan Milner:

Q: Are Structured settlements "insured" or guaranteed by someone other than the company issuing them?

A:All states have a Guaranty Association Act. The Act states that in the event that a member insurer, who is licensed to sell annuities in that particular state, is ordered to be liquidated by a court, the Guaranty Association Act enables the State Guaranty Association to provide protection up to a certain amount for its residents who are holders of annuity policies with the solvent insurer. For example in North Carolina, the State Guaranty limit is $300,000.

Q: Is it possible to "split" annuities among different companies to spread risk? Would that also help to keep the annuity amount "under" the maximum coverage provided by the NC GuarantyFund?

A:Yes, it is possible to "split" the settlement amount into different life companies for the structured settlement in order to stay under the $300,000 limit for the North Carolina Guaranty Association Act.

Structured settlement watchdog doing the "shake and bake"

Comments:

1. Regardless of Milner's capabilities as a settlement consultant, what Milner states contains inaccuracy and it may be unlawful. To wit...

N.C. GS 58-62-96 (a) No person shall make, publish, disseminate, circulate, or place before the public, or cause directly or indirectly to be made, published, disseminated, circulated, or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any oral or written advertisement, announcement, or statementthat uses the existence of the Association or this Article for the purpose of sale or solicitation of or inducement to purchase any kind of insurance covered by this Article. (emphasis added)

2. This is not the first time the structured settlement watchdog has snarled in the direction of Bryan Milner. Commentary on Milner's apparent faux pas in this regard extends back over a year. This is the 4th post!

3. Milner's website also contains a multitude of other inaccuracies concerning the companies that issue structured settlement annuities, including inaccurate AM Best ratings, inaccurate ratings from other rating agencies, display of annuity issuers no longer writing structured settlements

5. This author is aware that Millennium Settlement consultants are generally independent contractors and not employees of Millennium Settlement Consulting. Nevertheless given (1) neither Milner, nor Masry (as owner of the domain) have taken steps to correct inaccuracies or cease advertising that which appears should not be advertised (2) that the Millennium Settlements logo is being used and (3)Millennium Settlements is an IFS Company, one wonders if and when Millennium management or IFS management will take steps to stop the aforementioned.

May 16, 2010

Some settlement consulting firms offer ancillary services that extend beyond the sale of annuities or other insurance products and charge a fee for those services. Where discounts may be offered to members of associations, large groups or individuals such settlement consulting companies need to be aware of Circular Letter No. 9 (2009) which was issued by the New York State Insurance Department and deals expressly with such matters.

From personal observation a large number of settlement consultants, structured settlement brokers and settlement planners conduct business in New York with life agent licenses. Life agent licenses begin with the letters "LA" followed by a sequence of numbers. What they may not be aware of is that life agents may not charge fees. Only life brokers can charge fees. A life broker license commences with the letters "LB" followed by a sequence of numbers.

However, the department states that the fees charged should be reasonable, and like
insureds (or potential insureds) should be charged the same amounts for
the same services. Is this happening in practice?

Here is an excerpt from the Circular Letter No. 9

"Of course, under the Insurance Law, an insurance broker, but not an
insurance agent, may charge an insured a service fee for providing
insurance-related services, provided that the broker obtains a written
service fee agreement in accordance with Insurance Law § 2119(c).
Further, both an insurance broker and an insurance agent may, in
accordance with Insurance Law § 2119(a) and (b), charge a fee for
insurance consulting services pursuant to a written consulting
agreement. However, the fees charged should be reasonable, and like
insureds (or potential insureds) should be charged the same amounts for
the same services. See Circular Letter No. 9 (2006) (discussing
service fee agreements)."

May 05, 2010

The National Structured Settlements Trade Association has revamped its website bringing much needed technological changes which enhance its ability to serve its members and the general public.

The website includes a Financial Security document that is available for download by members of the public and members of the trade association who are subject to the insurance laws of the various states in which they hold licenses.

As I wrote in January 2009, NSSTA members must exercise extreme caution in downloading and using in a solicitation or offering of structured settlements, the financial security handout or they may face being in hot water with state insurance departments.

This author sought and received an
opinion on this very subject in October 2008 and the State
of New York
Insurance Department's opinion in response in January 2009 was:

" Insurance Law Sec 7718 broadly prohibits any person from
using the existence of the LIGCNY for the purpose of sales,
solicitation or inducement to purchase annuity contracts, including structured
settlement annuity contracts, However, the statute has
no application to 1) the LIGCNY itself; 2) any other entity that does
not sell or solicit insurance; or 3) an insurer that responds directly
to a policyholder upon written request and on a form prepared by the
corporation and approved by the Superintendent.

Life insurance agents and brokers clearly come within the scope of
the prohibition contained in Insurance Law 7718. The fact that the statement
"state insurance guaranty funds provide additional level of protection
for future structured settlement recipients" is general in nature, and
does not specifically reference the LIGCNY is irrelevant.
When
the statement is directed at New York residents, whose only coverage is
from the LIGCNY if a life insurer fails its obligations, it is an
implied reference to LIGCNY, and thus
prohibited by Insurance Law 7718 in the
absence of any statute's express exceptions. And based on the facts
presented, none of the exceptions is applicable here"

For those who believe that the disclaimer at the bottom of the NSSTA brochure is a source of comfort, please consider the following. The New York State Insurance Department expressed to this author that it was not even comfortable with one structured settlement industry website that contained a list of state insurance guaranty funds and their phone numbers designed to help consumers get to those who can legally answer their questions AND which included a similar disclaimer to NSSTA about not being an offer or solicitation for the purchase of insurance.

I'm sure there are those that do not appreciate my highlighting these points, but I didn't write the law. I am just reporting what I know for those that seem to conduct their business in blissful ignorance of the law the seat of their pants".

I have continued to hear from lawyers that members of the settlement profession are using the existence of guaranty funds in their solicitation of structured settlement annuities (in violation of state insurance law).

April 05, 2010

The Florida Department of Financial Services states in its April 2010 newsletter "we continue to see a pattern of noncompliance" in insurance advertising. The state regulatory agency has created a resource to assist agents and brokers to keep their insurance business in compliance. The PULSE newsletter was sent to all Florida licensed agents and brokers on April 5, 2010.

Some of the non compliant advertisers appear to be members of the structured settlement and settlement planning industry. What a pity!

This author has posted several blog posts on Structured Settlements 4Real and Legal Broadcast Network's Speaking of Settlements describing the compliance issue in another state, New York, yet of those firms with websites, only 4structures.com, LLC and Forge Consulting, LLC appear to be in compliance at the time of this writing.

This author sent an email on May 13, 2009 to the NSSTA President and its former Executive Director. In that email I questioned whether in light of Principle VI of its published
Code of Ethics (which requires compliance with state laws)
NSSTA has a duty to (1) inform its members (2) take a proactive role to
assure
that at the very least those
professional members (and
the organizations they represent) who serve on its board and committees
make an
effort to set an example in this area?

The NSSTA response was to request a list of names of brokers who appeared to be non compliant as well as stating that a request was made to add the subject to the June 3, 2009 Board of Directors meeting.. Yet 11 months later, why does this easily fixable problem still fester like an unattended boil?

Now a similar issue arises with Florida and no doubt other states. Here is an excerpt from the recent Florida Department of Financial Services publication:

Florida Administrative Code 69B-150.013 Identity of Insurer.

(1)(a)
The name of the actual insurer shall be stated in all of the insurer’s
advertisements.

(b) The form number or numbers
of the policy advertised shall be stated in any invitation to contract.

(c) An advertisement shall not
use a trade name, any insurance group designation, name of the parent company
of the insurer, name of a particular division of the insurer, name of any
reinsurere (sic) or any other party, service mark, slogan, symbol or other device
which would be misleading as to the true identity of the insureror create the
false impression that the parent company or reinsurer or any other party would
have any responsibility for the financial obligation of the insurer.

(6) The use of letters,
initials, or symbols of the corporate name or a trademark that would have the
tendency or capacity to mislead or deceive the public as to the true identity
of the insurer is prohibited unless the true, correct and complete name of the
insurer is in close conjunction and in the same sizetype as the letters,
initials, or symbols of the corporate name or trademark.

(7) The use of the name of an
agency or other nomenclature in type, size and location so as to have the
capacity and tendency to mislead or deceive as to the true identity of the
insurer is prohibited.

(10) All advertisements used by
agents, producers, brokers or solicitors of an insurer must have prior written
approval or prior oral approval with subsequent written confirmation of
approval by the insurer.

If one does a brief survey of websites associated with structured settlement industry today one sees a number of websites with:

Full legal name of insurance company not displayed

City and State of Home Office of insurer not displayed ( a New York Insurance law requirement)

Use of insurer marks without the full legal name and in the same size and type as the mark.

A communication that inaccurately implies that an insurer's obligations are backed by Berkshire Hathaway (see 1(c) above and our story from 11/2009).

Apparent violations of the prohibition on advertising of state guaranty funds

Why does it
seem that little is done until names are published, or threatened to be published on the Internet? To wit, the industry's credential puffery sickness.

It seems to me that it would make sense to develop a "blue sky" way of displaying the informationthat incorporates the various state requirements. Furthermore, for the umpteenth time, the trade association should provide a best
practices digest to its members that is updated annually. Is there any benefit to anyone if industry members are not in compliance?

February 10, 2010

The final New York insurance producer disclosure regulation was published on February 10, 2010 and is to take effect January 1, 2011. Some Producer advocacy groups feel that the new law (11 NYCRR 30) includes requirements that they believe will decrease life insurance coverage,
hurt sales and cost jobs without benefiting consumers. Greater clarification is needed to confirm whether there is any exception to the requirements for the sale of structured settlement annuities by licensed producers. But first let's take a look at the substantive portions of the new law:

§ 30.3 Disclosure of producer compensation, ownership interests and role in the insurance transaction.

(1) a description of the role of the insurance producer in the sale;

(2) whether the insurance producer will receive compensation from the selling insurer or other third party based in whole or in part on the insurance contract the producer sells;

(3) that the compensation paid to the insurance producer may vary depending on a number of factors,including (if applicable) the insurance contract and the insurer that the purchaser selects, the volume of business the producer provides to the insurer or the profitability of the insurance contracts that the producer provides to the insurer; and

(4) that the purchaser may obtain information about the compensation expected to be received by the producer based in whole or in part on the sale, and the compensation expected to be received based in whole or in part on any alternative quotes presented by the producer, by requesting such information from the producer.

(b) If the purchaser requests more information about the producer’s compensation prior to the issuance of the insurance contract, the producer shall disclose the following information to the purchaser in a prominent writing at or prior to the issuance of the insurance contract, except that if time is of the essence to issue the insurance contract, then within five business days:

(1) a description of the nature, amount and source of any compensation to be received by the producer or any parent, subsidiary or affiliate based in whole or in part on the sale;

(2) a description of any alternative quotes presented by the producer, including the coverage, premium and compensation that the insurance producer or any parent, subsidiary or affiliate would have received based in whole or in part on the sale of any such alternative coverage;(3) a description of any material ownership interest the insurance producer or any parent, subsidiary or affiliate has in the insurer issuing the insurance contract or any parent, subsidiary or affiliate;(4) a description of any material ownership interest the insurer issuing the insurance contract or anyparent, subsidiary or affiliates has in the insurance producer or any parent, subsidiary or affiliate; and(5) a statement whether the insurance producer is prohibited by law from altering the amount of compensation received from the insurer based in whole or in part on the sale.

§ 30.4 Retention of disclosure.The insurance producer shall retain a copy of any written disclosure provided to the purchaser pursuant to section 30.3 of this Part for not less than three years after the disclosure is given, unless the insurance producer has a written agreement with the insurer that the insurer shall retain such a copy .

§ 30.5 Exceptions.This Part shall not apply:(a) to the placement of reinsurance;(b) to the placement of insurance with a captive insurance company pursuant to Article 70 of the Insurance Law;(c) to an insurance producer that has no direct sales or solicitation contact with the purchaser, which may include wholesale brokers or managing general agents;(d) to a sale of insurance by a person who is not required to be licensed as an insurance producer under Insurance Law section 2102(a)(1) for the purposes of that sale; or(e) to renewals, except that if the purchaser requests more information about the producer’s compensation less than 30 days prior to a renewal or less than 30 days after a renewal, the insurance producer shall disclose to the purchaser in a prominent writing the information required by subsection 30.3(b) of this Part within fivebusiness days.An observation concerning possible exceptions and settlement industry stakeholders.

The exception for placement of reinsurance seems clear.

The exception, "to an insurance producer that has no direct sales or solicitation contact with the purchaser, which may include wholesale brokers or managing general agents" needs further clarification due to the peculiarities of a structured settlement transaction (explanation below).

The annuity purchaser in a structured settlement transaction is most often a qualified assignment company, to whom both the plaintiff settlement planner/broker and defense structured settlement broker have direct contact, yet the direct sales and solicitation contact of the product sold may be to other parties such as the plaintiff, the plaintiff lawyer, guardian ad litem, insurance adjuster or subscription insurance market leader. Perhaps the National Structured Settlement Trade Association can deliver some "best practices" guidance to its membership.

Several structured settlement companies, including my firm, 4structures.com, LLC already provide a structured settlement affidavit or declaration that includes compensation disclosure, and have done so for years.

As to the rule itself. a spokesman for the External Affairs committee of the Risk and
Insurance Management Society (RIMS) feels that the New York law has become
too diluted and does not do enough. An excerpt of his comments published in the February 12, 2010 Insurance Journal follow below:

“The intent of the rule, as it was initially presented, was to bring
greater clarity and certainty to the insurance purchase transaction in
order to protect consumers," he said. "While this objective was a
positive first step by the Department; each subsequent revision has
diluted the original intent and has resulted in the final rule that
falls short of complete and mandatory disclosure, for which RIMS has
been a long-time advocate.

Want Structured Settlement Quotes Now?

Structured Settlement Quotes Form (Secure Form)Click Here If You Are Currently a Party to a Personal Injury or Wrongful Death Law Suit or representing, or insuring one of the parties. This link is NOT intended for people who already have structured settlements. You can also use this form to request more information or get quotes for structured attorney fees, employment related structured settlements, structured oil & gas lease bonus payments, structured celebrity endorsement fees, structured property installment sales, structured business installement sales, structured real estate commissions, jackpots and lotteries and other opportunities to use a non qualified assignment
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Guide to Structured Settlements

Structured Settlement Quote Lock-Ins | What You Need To KnowWhat Is a Structured Settlement Lock-In Mean? How do does a plaintiff benefit from a structured settlement quote lock in? How does the defendant/insurer/court benefit from using a structured settlement lock-in? Where to be careful when using structured settlement lock ins.

Structured Settlement Annuity Company Customer Service Phone NumbersIf you have a structured settlement this is a huge time saver. A very useful list compiled by 4structures.com LLC, which includes both current AND former structured settlement annuity issuers and reinsurers. If you have simple bank or beneficiary changes, or if the insurance company that issued the structured annuity has merged, sold or spun off its block of structured annuity business (e.g. Aviva, GE Capital, CNA) or changed its name and you're trying to track them down, here you go! The list is regularly updated. Last update July 2014

Structured Attorney Fees for Tax Deferral for 2015 SettlementsStructured attorney fees is a financial strategy that offers many benefits to lawyers and law firms. Lawyers CAN structure their legal fees even if the plaintiff doesn't structure. In 2015, there are multiple ways to structure your fees, such as the new index linked structured settlement. . Plan NOW for year end! Put structured attorney fee expert John Darer on your settlement planning team.

Structured Settlement Payments | Types of Structured SettlementsWays You Can Structure Your Settlement Payments. With a structured settlement you can have more than one type of payment in a single contract. Different types of structured settlement payments can be customized and combined to meet your needs on a stand-alone basis, or in conjunction with other financial products. You can also diversify your structured settlement by funding with more than one annuity issuer, with treasury funded structured settlements or with the new index linked structured settlement.

Treasury Funded Structured Settlements Treasury Funded Structured Settlements are a settlement option for the most conservative using the OTHER permissible qualified funding asset under IRC 130(d), United States Treasury Bonds in addition to, or instead of, structured settlement annuities. Treasury Funded Structured Settlements can also be used to fund installment sales, also known as structured sales.

Structured Settlement Annuity Companies 2015Which life insurance companies issue structured settlement annuities in 2015? A list of current structured annuity issuers, the location of their home offices and their financial ratings from A.M. Best, Moodys, Fitch, Standard & Poors, links to their websites and other useful information.

Rated Ages and Structured SettlementsRated Ages for Structured Settlement Annuities present advantages to all parties. Shift the mortality risk bearing to a life insurance company whose business it it is to assess mortality risk to price its life insurance and annuities. Boost your structured settlement annuity benefit per premium dollar, or your yield, on lifetime payments. Rated ages help to reduce the cost of funding a Medicare Set Aside arrangement where a Structured MSA is being used.

New York Structured SettlementsOver 50 pages of useful information and ideas about structured settlements, settlement planning and litigation recovery managements for New York residents, New York Lawyers and New York judges

New York General Obligations Law §5-1702The New York Structured Settlement Protection Act imposes mandatory requirements on the defendant or the defendant's legal representative when a structured settlement is created (as part of the resolution of a case)

Comments About Structured Settlements 4Real Blog

"I wanted to send you this email to say Happy New Year to you and your family. May God continue to bless you. I am grateful that I had the opportunity to meet you on the phone. I truly thank you for introducing me and my son, (redacted) to (lawyer). It is people like you that God put in the path of my son situation. Thanks a million times! {original on file] 1-2-2015

"John Darer has been nothing but honest,helpful,informative with options, & his
"time" was NEVER an issue!"-Andrew S 8/18/2012

" I wish there were more like you" JG 9-15-2014

In my opinion, John Darer is an excellent consumer advocate in the insurance industry. When I had no one else to turn to after running up against the stone walls of these giant insurance company, John Darer used hours of his own time to investigate my situation. Not only is this an invaluable service to me the consumer but it is also of great value to the insurance industry by providing them consumer feed-back. This allows the insurance companies to correct their faults and move toward greater transparency which improves the overall public image of the insurance industry as a whole" JW 9/4/2014

John, Keep fighting the fight. -NASP member 12-4-2013

John...Thank you for your professional advice-Brandon 11-13-2013

"...Thanks to Mr. Darer's blog and personal pointers I was able to obtain a fair price for the sale of client structured settlement. Therefore, if one has no choice, but to sell their settlement educate yourself first before selling start by reading John's blog" Mr P. 11/17/2012

"I always appreciate when he (John Darer) keeps us informed on regs and rules. No one does it better"- structured settlement industry colleague and reader RY 7/26/2012

"Amen - and continued thanks for your vigilance, John"- RL 8/18/2011

"Thanks for writing these great blogs on your site John! As an individual investor I have learned so much about the secondary market (for annuities, structured settlements, lottery payments, etc.) from your blogs and video series!!!" (6/5/2011)

I have found the intelligent and forthright information on your site a godsend. So much so I have tried in a small way to pass on my findings to others. Please keep up the good work and enhance your well deserved reputation as the authority on this subject- Mike 4/29/2011

John -
I can't thank you enough for bringing this to my attention. In my wildest dreams... PJ-May 12, 2011

John, I love reading your blog! Not only have I found very useful information there, but the comedy is much appreciated! Thanks for talking about "the big pink elephant in the living room" that everyone else ignores!
Thank you again for your help via phone and blog! I really needed to hear what you had to say today! BM 11/23/2010

John—this (video published 11/2010) is a well done piece. I like the way you always stick to the facts-AM

What a wonderful blog you have! I have completely enjoyed reading some of your posts (4/16/2010)

Thank you so very much for discussing my concerns about Symetra, my annuity company. I am amazed that PI attorneys as well as a settlement broker in San Diego, could not answer the simplest questions I had regarding the Safeco/Symetra issue. Your blog/web site is most interesting and informative, and I am grateful you have take on the "watchdog" role!
Thank you so much again (3/25/10)

"Awesome" 3/17/2010 Iowa reader

"Ever Feel Like You're Pissing Up A Rope?" 3/3/10

ThankYou for keeping integrity alive. CS 12/1/09

"Keep up the good work exposing abuses in our industry - our future depends on clients being properly advised."-CD

Just checked out your blog and loved it. Keep up the good and balanced work-DL

"...we have never met but I thoroughly enjoy your web site and blog - excellent material…-PB

"I enjoy your website and its content. Informative and well written"-JC

I heard a radio ad for the Peachtree Settlement Fund as I was driving into work this morning. (San Francisco Bay area.) I decided to check it out on the Internet and came upon your blog. Thank you very much. I do not have a “structured” settlement,

"All the others that I had emailed & have seen on the net were "cash now types" & have no concern of me & just are looking for my $$$. When I came across your site & blog I realized that u are an upstanding guy & are not like others. That's why I emailed"

This was Great. Right On Point-TS

"I love the chicken counter! So hilarious and makes a great point"-H

Always Thought Provoking John!-HS

"Other Than John Darer No One Seems To Be Doing Anything"-J

Thanks for your help and also for the good work you do on behalf of our industry-L

(Structured Settlement Transparency Initiative) A Worthy Fight! -BF

"Thanks for all that you do. This (Structured Settlement Transparency Initiative) is an extremely worthwhile project"-DS

"Thank you for being the inspiration that you are and for being a strong advocate for integrity in our business"-KL

"I Commend You On Your Effort To Make a Difference!" -R

"He is a fabulous writer who has a great passion for the structured settlement industry. I commend him on the passion he invokes when he writes on his blog listed above. That type of commitment and passion is hard to find and is rare in this world" -AC

"I love your weblog. Keep me on your e-mail list". JG

"Well done, John. That is an outstanding piece of work". (JL)

"Go get ‘em John! Good work". H

Structured Settlement Best Practices Corner

New York Insurance Advertising law requires the full name of the Insurer to be listed along with the city and state of the principal office. Stating that you represent these fine companies using Insurance company logos without the preceding information are also illegal

When it comes to settlement documents it is the ultimate responsibility of the lawyers or claims adjusters who receive input concerning the structured settlement aspects of the documents to actually read the entire document, exercise independent thought and advise their clients properly

Be aware that financial advisors use of testimonials is prohibited or restricted

Most states require that Testimonials represent the CURRENT opinion of the person who made the testimonial. Be prepared to back it up.

Number of States That Prohibit Payment of QSF expenses by licensed agents and brokers

5
Survey not yet complete.

Insurance and Legal News

Legal Search Engines

Retirement Resources

Structured Advertising That Just Ain't Right

Structured Settlement Cash Now ScandalThere is a clear and present danger to both sellers of structured settlements and investors in structured settlement cash flows due to lack of regulations governing sales practices

Are Annuitants Getting High on Cash Now "Ecstasy"?Is "cash now" the new "esctasy" ? Sure seemed like it for a while with ubiquitous advertising that dangles "financial cat nip". The problem is that aside from a modest advance, unregulated "cash now pushers" simply cannot DELIVER "cash now" for structured settlements arguably making it fraudulent advertising. Click for a discussion.

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All posts Copyright 4structures.com, LLC 2005-2015. All rights reserved. Filings have been made with the US Copyright Office. With the exception of those videos in which John Darer appears, no claim is made to videos, music or images in any mashups on th

Comments and Trackback Policy

Structured Settlements 4Real filters comments and trackbacks to its posts BEFORE allowing them to be published

While spontaneous comments to this blog are welcome and add spice to the interactive nature of blogs, the unscrupulous practice by some to deliver comment spam, to connect all manner of unrelated products to structured settlements, is NOT tolerated by this author and thus necessitates this practice.

Special Needs Blawgs and Resources

Jay J. Sangerman, PLLCA New York and Florida based AV rated estate planning law practice with an emphasis in Supplemental Needs Trusts, which assists attorneys in efficient case settlement though the use of Supplemental Needs Trusts and Special Needs Trusts; and Elder Law

Day Pitney LLP - People - Keith Bradoc GallantBrad's practice includes traditional trust and estate planning and administration, special needs and disabilities planning, planning for same-sex couples and their families, planning for incapacity, and all types of probate litigation.

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Why Take a Structured Settlement?

A structured settlement offers guaranteed financial security to accident victims and their families. A structured settlement involves a customized stream of payments, a structured settlement provides long-term stable tax-free income, for a period of years or a lifetime. Unlike other income annuities. a structured annuity can have multiple payment streams to address multiple needs in a single contract.